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Wheels Up membership-based private aviation service to take off from Texas starting Nov. 1

The customized interior of Wheels Up's Beechcraft King Air 350i. (Courtesy of Wheels Up)

A year-old, membership-based private aviation company called Wheels Up is expanding to Dallas — its first office outside of its New York home.

Starting Saturday, the company said it will offer service to meet “the significant and growing demand for short to medium-haul flights” in Texas and regionally, including Arkansas, Louisiana, Kansas, Nebraska and Oklahoma.

“These markets represent a significant opportunity for Wheels Up [and] our unique membership model,” founder Kenny Dichter said in a statement. He also founded Marquis Jet, the originator of the 25-hour fractional jet card, which sold in 2010.

Wheels Up had 575 members in August and Dichter expects to have more than 1,000 by year’s end.

It charges an initiation fee of $15,750 and annual dues of $7,250 for an individual/family membership. A corporate membership costs $25,000 plus $10,000 in annual dues. Fliers also must pay a fee per flight hour.

In this market, Wheels Up plans to fly customized nine-passenger Beechcraft King Air 350i turboprop planes that will be based in Dallas and Houston.

“The King Air 350i is ideal for the Texas market as it offers excellent short field performance and greater payload capacity on less fuel for consistent savings,” Dichter said.

Wheels Up has hired two employees in Dallas, but plans to add more, a spokeswoman said.

Wheels Up faces hefty competition from fractional jet and charter companies — some right here in North Texas.

Dallas-based Flexjet, a private fractional-ownership jet company, is expanding. Earlier this month, it agreed to buy up to 50 Gulfstream Aerospace jets to add to its fleet of Learjets and Challengers.

Virgin America today launches Dallas Love Field flights to New York’s LaGuardia with a fare sale

Sir Richard Branson attended the Virgin America Dallas Love Field Launch Celebration at the House of Blues in Dallas on Oct. 13. (Michael Buckner/Getty Images)

Virgin America today launched its four daily nonstop flights between Dallas Love Field and New York’s LaGuardia Airport with a fare sale.

Virgin America‘s “Go Nonstop to the Big Apple” sale offers fares starting at $89 one way for seats in the main cabin when bought 21 days in advance.

John Macleod, Virgin America’s senior vice president of planning and sales, said the airline has had “a great response” so far to its low introductory fares. That shows “travelers are ready for more fare and product competition at LaGuardia, particularly on this key business route to Dallas Love Field,” he said in a statement.

On Oct. 13, the California-based airline shifted its service from the Dallas/Fort Worth International Airport to Love Field as flying restrictions lifted at the smaller, city-owned airport for the first time in about 35 years. It began offering nonstop service between Love Field and Los Angeles, San Francisco and Washington Reagan National airports.

By late April, Virgin America will fly 18 daily flights from Love Field, compared with six daily flights it offered from D/FW Airport.

Virgin America’s Love Field-LaGuardia schedule

 

 

Virgin America is be the only carrier on the Love Field-to-LaGuardia route to offer three classes of service (first class, main cabin select and economy class) as well as fleet-wide WiFi service, power outlets at each seat, confirmed seating, touch-screen seatback entertainment  and a full-service food menu.

American Airlines and US Airways will stick to a miles-based frequent-flier program when they merge in second quarter 2015 (UPDATED AT 9:20 A.M.)

American Airlines passengers check in at the Miami International Airport. (AP Photo/Alan Diaz)

American Airlines will stick to a miles-based frequent-flier program when it merges that with US Airways’ loyalty program next year, according to details unveiled today by American.

Many airline rivals have switched to or have announced they’ll soon convert to a dollar-based frequent-flier program where the more travelers spend for a ticket and related fees, the more miles they earn.

First, travelers who are members of both American and US Airway’s frequent flier programs can match their accounts early next year. Then, US Airways’ Dividend Miles and American’s AAdvantage programs will combine mileage balances and align elite member levels and criteria in second quarter 2015.

American said the changes will create “a more seamless experience” on American or US Airways. The announcement comes 10 months after the two airlines merged.

Update at 9:20 a.m.: American and US Airways combined have about 110 million frequent-flier members, but that’s expected to be closer to 100 million after the two loyalty programs merge due to travelers who belong to both programs, Suzanne Rubin, president of American’s AAdvantage program, said in an ongoing conference call.

The integration of the two airlines’ frequent flier programs is one of three big milestones coming up. The other two are: securing a single operating certificate from the Federal Aviation Administration, which is expected by mid-2015; and putting both airlines on the same reservations system, which is expected in late 2015.

Update at 9:25 a.m.: Come March, American and US Airways will be the only major U.S. carriers left with a traditional miles-based frequent flier program.

Update at 9:25 a.m.: Several rivals have announced that they’re converting their frequent flier programs form miles to a dollar-based system. Such programs mean the more a person spends for a ticket and related fees, the more miles the traveler will earn. United Airlines Inc. said this summer it will convert its MileagePlus program to a dollar-based program in March. Delta Air Lines Inc. said in February it will make the shift on Jan. 1 and Dallas-based Southwest Airlines Co. which switched to a dollar-based system in 2011.

Update at 9:25 a.m.: American is not following suit – at least not immediately – because Rubin said the airline and US Airways are focused on completing the merger of all of their systems, including their frequent-flier programs, before considering more radical changes.

Update at 9:25 a.m.: “We have been very much focused on integrating as quickly as possible so we can get merger benefits out to customers and the marketplaces as quickly as possible,” Rubin said during this morning’s teleconference. “As you can imagine, there’s a lot of work that goes into combining two programs of this size. We’re watching the marketplace and will continue to do so … now that we’ve seen competitors move to this type of construct.“

American has simplified the integration of the two programs, largely focusing on make sure the two airlines’ elite fliers — passengers who travel the most — are kept happy. Here are some of the major changes to American’s AAdvantage program and US Airways’ Dividend Miles program:

* For US Airway’s frequent flier members who do not have an AAdvantage account, American will create one for them and customer mileage balances will automatically transfer in second quarter 2015.

* For American AAdvantage members who do not have a Dividend Miles account, no action is needed.

* For travelers who belong to both American and US Airway’s frequent flier programs, their elite status will be based on their combined elite-qualifying activity from 2014 for status through February 2016 and their year-to-date 2015 activity will be combined to determine their status through February 2017. American will honor qualification of new elite status levels.

* US Airways’ four elite status levels will be merged into AAdvantage’s three levels. Dividend Miles’ Silver level will become AAdvantage gold, requiring 25,000 miles/points or 30 segments. Dividend Miles’ Gold and Platinum levels will become AAdvantage Platinum, requiring 50,000 miles/points or 60 segments. Dividend Miles’ Chairman’s Preferred level will become AAdvantage Executive Platinum, requiring 100,000 miles/points or 120 segments.

* The flight segments (one-way flights) needed to qualify for the AAdvantage Elite Executive Platinum status membership will increase from 100 to 120 on Jan. 1 for the 2016 membership year.

* Once the frequent flier programs combine next year, American will give all elite members complimentary upgrades on American flights up to 500 miles that will be automatically requested at booking. (The upgrade policies for American and US Airways flights will work separately until the airlines move to a single reservation system later in 2015.)

* Starting Jan. 1, bonus miles for AAdvantage members with business class tickets on American and US Airways will increase from 25 percent to 50 percent to align with the benefits for Dividend Miles members. Dividend Miles’ Chairman’s Preferred members and AAdvantage Executive Platinum members will receive complimentary same-day changes on American flights.

* Once the programs are combined, AAdvantage Executive Platinum members will continue to receive eight upgrades on American and US Airways marketed flights.

In January, American began offering reciprocal benefits to members of both frequent flier programs.

In April, the airline introduced changes for frequent fliers, which brought American and US Airways’ policies more in line with each other and major competitors. American lowered the number of miles needed to get a free ticket for customers who can fly at less busy times, but it began charging more miles for people who want to travel on the busiest days, such as the Sunday after Thanksgiving.

 

Fidelity will provide 401(k) services to American Airlines’ employees and retirees

Illustration by Robert Neubecker/The New York Times.

American Airlines Group Inc. has chosen Fidelity Investments to provide 401(k) services to employees enrolled in the airlines’ retirement plan starting in mid-2015, the Boston-based financial services firm said today.

The five-year agreement includes roughly 120,000 employees and retirees, Fidelity said. The total amount of retirement assets is expected to be around $14 billion — for American and US Airways retirement plan participants combined — at that time,  according to Steve Patterson, Fidelity’s executive vice president of sales.

Fidelity has provided retirement services since 1993 to US Airways, which merged with American in December.

Elise Eberwein, American’s executive vice president of people and communications, called Fidelity “a best-in-class administrative partner” and noted the company’s “robust online technology platform” and service centers than can provide individual support.

Fidelity spokesman Chuck Kabat said Fort Worth-based American wanted a 401(k) service provider that could serve its geographically dispersed workforce with many employees who do not work at a traditional desktop computer.

Overall, Fidelity has $4.9 trillion in assets under administration as of Sept. 30, including $1.2 trillion in 401(k) retirement accounts.

Five airline musts to read and watch

Last week was a busy one for airlines with earnings reports and other news.

Here are five must-see airline stories and videos that you might have missed. The items are based on my research, the Business Travel Coalition and other media outlets and blogs.

1. Lower fuel prices lead to record profits at airlines. North Texas’ two airlines — American Airlines and Southwest Airlines — both reported record earnings.

2. Virgin Atlantic Airways gives a peak inside its new Dreamliner jet — complete with the airlines’ signature mood lighting.

3. Find the best food in the air and on the ground. New York food magazine Saveur’s annual dining survey ranked airlines for the quality of their food and rated the best food destinations. Saveur’s Culinary Travel Awards polled a panel of 36 experts and, separately, its readers to select the winners.

4. How airports are using the Internet to enhance the passenger experience. This article features efforts at London City Airport and the Helsinki Airport in Finland.

5. Air New Zealand makes another epic safety video. (See above video clip.) The aiarlaines’ third Hobbit-themed 5-minute video precedes the final film The Hobbit: The Battle of Five Armies, which is scheduled for release next year.

We offer free PR advice to disgruntled readers

On Facebook today, I saw some grumbling by American Airlines retirees who were displeased that neither I nor Andrea Ahles of the Fort Worth Star-Telegram covered their protest Thursday over retiree travel benefits.

So, as a favor, here’s some free public-relations advice applicable to anyone who would like to get coverage:

1. Stage your events when nothing is happening, not when everything is happening.

You want to know why neither Andrea nor I covered the protest? One reason is because you staged it while five airlines – five, count them, five – were talking to analysts and reporters about their third-quarter earnings.

Among the airlines were Southwest Airlines and American Airlines, the two primary companies we cover.

We were either listening to the calls or writing our earnings stories. It was one of the busiest days of the year for an airline reporter. I started working around 6 a.m. and finished work around 7 p.m., and I’m sure Andrea put in the same amount of time or more.

Perhaps some thought that we would not cover earnings and instead cover the protest outside American Airlines headquarters. If so, some thought wrong.

2. Old news repeated isn’t new news. We understand that the retirees aren’t happy about their reduced status. We’ve reported that. We were out with you in the hot August sun covering that protest. But there’s nothing new here, even if you have more protests and demonstrations.

3. Insulting reporters by saying they’re on the payroll of the companies they cover is not only libelous but a poor way to improve your credibility with them. It undermines any argument you want to make, because if you’ll lie about the reporter, you’ll lie about other things as well.

3 idle thoughts for Friday

This butterfly (spotted tiger longwing?) struts its stuff at Texas Discovery Gardens at Fair Park in Dallas. (Terry Maxon/DMN)

1. When things go badly, it’s because of things beyond our control. When things go well, it’s because we’re smart.

2. Las Vegas isn’t taking any bets on the vote on that flight attendant contract at American Airlines, I don’t think.

3. I’m glad that butterflies have wings, and spiders and snakes don’t.

Win-win? Both American Airlines and Southwest Airlines say they’re doing well in the wake of the Wright amendment’s end

As American Airlines Group and Southwest Airlines reported Q3 2014 results Thursday, executives at both carriers said things are going well following the Oct. 13 end of the Wright amendment.

That 1980-era law banned nonstop flights beyond Texas and a handful of other states, which had grown to nine states including Texas. A 2006 federal law ended the ban on U.S. flights as of Oct. 13.

First, we have this from American Airlines president Scott Kirby:

“We continue to get questions about the Wright Amendment and since it’s topical, I’ll go ahead and address it upfront. While we can’t disclose a precise estimate for the impact of the Wright Amendment, we feel that our great frequent flyer program, great product including first-class, better frequency advantages in the important business market and the best employees in the airline business position us to compete and win.

“And while it’s early, from October 13 when the Wright Amendment went away, through the end of October, we expect PRASM in the markets that have new non-stop competition from Love Field to be up 3 percent. So even though it’s early, we are off to a good start in that competition.”

(PRASM is passenger revenue per available seat mile.)

Southwest chairman and CEO Gary Kelly offered this observation:

“Since the end of the quarter, the long anticipated repeal of the Wright amendment happened. The long anticipated Southwest effect happened, too. And on October 13, we added seven new non-stop destinations, 22 more daily departures to Dallas Love Field. That was the largest single day expansion in our history, and load factors so far have been in excess of 90 percent on these 22 new flights.”

(By comparison, Southwest’s load factor in September was 80.5 percent throughout its system, meaning it had paying passengers sitting in 80.5 percent of the seats on Southwest’s flights. In October 2013, the average load factor system-wide was 79.9 percent.)

It’s unanimous – Ebola scares aren’t hurting U.S. airline bookings

In passing, the impact of the Ebola virus on airline bookings came up in almost every airline earnings call Thursday. The common response from airline executives was that they’re not being hurt by concerns about Ebola.

American Airlines president Scott Kirby acknowledged a brief dip in bookings that quickly went away.

“We have not seen a meaningful impact. If you followed us in the airline industry over the years, we sometimes have very short-term impacts from the headlines. And so on the day after the congressional hearings last week, when there was a media frenzy around it, we saw I think a measurable impact for one day and then bookings have snapped back to normal,” Kirby told analysts and reporters on American Airlines Group’s earnings call.

“So really no impact. And I hope that there are no more cases in the United States or really anywhere and that this gets resolved quickly and that we continue to have no impact,” he said.

Other airlines mentioned Ebola, sometimes in connection with other factors, but said it wasn’t hurting their business.

“As we move into fourth quarter, the demand environment remains solid, and strong revenue trends have continued,” Southwest Airlines chief financial officer Tammy Romo said. “We have not seen any noticeable negative impact on demand from Ebola or macroeconomic news.”

Southwest chairman and CEO Gary Kelly, asked later in his carrier’s call about Ebola, said the impact was: “None. Negative. Nada.”

“We have experience with this in the past with other outbreaks. So few people have been affected in the United States. But to give a straight answer to your question, there’s absolutely no evidence in any of our research that we’ve seen an impact from it,” Kelly said.

“Although the transatlantic entity has experienced several recent pressures, including Middle East unrest, Ukrainian conflict and more recently concern about Ebola, we have not seen any meaningful impact on bookings to date,” United Continental vice chairman and chief revenue officer James E. Compton said on United’s call.

“Now some of you have asked whether Ebola is negatively impacting bookings and if lower oil prices are an indicator of softening demand,” Alaska Air Group vice president of planning and revenue management Andrew R. Harrison said. “From what we see today, the answer is no to both these questions.”

Last week, the Ebola question came up on the Delta Air Lines call. The answer from Delta was the same as on Thursday’s calls.

“We monitor it on a daily basis and we have not seen any changes in the booking trends,” Delta executive vice president Glen Hauenstein told analysts.

 

Southwest CEO: International flights are a ‘drag on our results’

Southwest Airlines chairman and CEO Gary Kelly told analysts and media Thursday that its new international service has been “in line with our expectations,” but not great.

Gary Kelly (Terry Maxon/DMN)

“I will admit to you all they are a drag on our results. Right now, we’ve got some work to do,” Kelly said.

Southwest has already announced Baltimore-Costa Rica service to launch in March 2015, and the carrier will add a “handful of other destinations next year, all with low frequency.”

Southwest began taking over the AirTran Airways international system on July 1 and will finish that takeover before AirTran flies its last flight, Atlanta-Tampa, on Dec. 28. Southwest acquired AirTran in May 2011.

He said international growth in 2015 will be “very modest, particularly considering that Houston doesn’t open until late next year.”

He was referring to a five-gate international terminal under construction at Houston Hobby Airport. It is scheduled to open around the end of third quarter 2015.

UPDATE, 12:55 P.M.: Late on the earnings call, Kelly took up the question of the international routes again. He said one should view it as a question of transitioning the routes from the AirTran network to the Southwest network and setting up the schedule to take full advantage of the international routes.

“We are phasing in our international operations gradually, and right now, the financial performance isn’t what one would expect once those markets are mature. There is nothing unusual about this. There is nothing unexpected. It’s a brand new venture for us. It really has nothing in other words to do with macro issues or whether there is too much supply or too little supply,” he said.

“Those routes were performing very well on AirTran, and I expect by this time next year, they will be performing very well on Southwest Airlines,” he said.

BACK TO ORIGINAL ITEM: The comments on international service were the only ones that were less than buoyant by Kelly and CFO Tammy Romo.

On a happier note, Kelly reported strong results from the Oct. 13 launch of long-distance service from Dallas Love Field. The 22 added flights to seven cities have had load factors in excess of 90 percent, meaning that less than 10 percent of the seats remained empty.

Oct. 13 was the date that the 1980 Wright amendment expired, allowing Southwest and other carriers to fly nonstop beyond Texas and eight other states to which they had been limited prior to Oct. 13.

On Nov. 2, Southwest will grow the non-stops beyond the Wright amendment area by 27 flights and eight destinations. At that time, it will cut 118 flights inside the Wright amendment area to 100, and have 49 flights beyond the Wright amendment area.

On another matter, Kelly thanked the leadership of the International Association of Machinists and Aerospace Workers for agreeing to a tentative agreement covering airport and reservation agents. The IAM was one of seven open contracts among Southwest’s labor groups.

“I hope there will be more tentative agreements that will follow quickly,” Kelly said.